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Tivo Worth $11 To $15.50 In Takeout, Jefferies Predicts

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Shares of TiVo Inc. (NASDAQ: TIVO) may be worth $11 to $15.50 apiece in a takeout scenario, according to a research note from Jefferies.

"TiVo currently trades at~3.7x our current year F'17 EBITDA est of $148MM. A 5x EBITDA multiple would imply TiVovalued around ~$11 / share. At 8x, TiVo would be valued over $15.50/sh," analyst Brian Fitzgerald wrote in a client note.

Earlier, New York Times, citing sources familiar with the issue, said Rovi Corporation (NASDAQ: ROVI) is in advanced negotiations to acquire TiVo. TiVo shareholders would reportedly receive both cash and stock; however, the price tag is yet to be determined.

"The deal makes sense to us; we would not be surprised if other suitors emerged," Fitzgerald said.

According to Jefferies, the combined TiVo + Rovi entity would have more than 6K issued or pending patents. TiVo alone has generated about $1.6 billion of settlements to-date from patent enforcement lawsuits versus DISH Network Corp (NASDAQ: DISH) ($500 million settlement), AT&T Inc. (NYSE: T) ($215 million+), Verizon Communications Inc. (NYSE: VZ) ($250 million+) and Cisco/Moto/Time Warner ($490 million).

There are 380+ issued patents in TiVo's portfolio, plus 340+ pending patents, many of which expire beyond '18, Jefferies highlighted.

The analyst noted that TiVo's nascent research business is largely overlooked and its retail business has inflected and now looks like a tailwind.

Jefferies has a Buy rating with $18 price target on TiVo shares.

On the acquisition rumors, shares of TiVo have surged more than 24 percent and were currently trading at $9.32.

Latest Ratings for TIVO

DateFirmActionFromTo
Aug 2018MaintainsBuyBuy
Aug 2018MaintainsOverweightOverweight
Feb 2018MaintainsNeutralNeutral

View More Analyst Ratings for TIVO
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